Herbalife Ltd. reached an
agreement with Anschutz Entertainment Group to have its logo on the front of
the Los Angeles Galaxy’s jersey in a deal that sources put between $4 million
and $5 million annually for five years.

The figures are well above
the reported $1 million that XanGo spent on Real Salt Lake’s jersey but beneath
the $20 million-plus that the biggest European teams command for their jerseys
(see chart).

Though he declined to
discuss terms of the deal, AEG Sports President Shawn Hunter said it was the
equivalent of one of the biggest naming-rights deals in the country.

“This clearly sets a
benchmark in MLS that other teams can shoot for,” Hunter added.

The agreement gives
Herbalife, a global, direct-sales company that specializes in weight-management
and nutritional supplements products, rights to what many consider the world’s
top-selling jersey: David Beckham’s No. 23.

When the English soccer
star, who will join the Galaxy in July, left Manchester United four years ago
for Real Madrid, the club’s jersey sales reportedly rose from 900,000 per year
to more than 3 million.

“When he goes to a press
conference and throws on a Galaxy jersey and that Herbalife jersey, it will be
on the front page of every sports section in the world,” Hunter said. “That
can’t be quantified.”

Soccer jersey deals

Sponsor

Team

Reported annual value

Tamoil

Juventus

$30 million

BenQ-Siemens

Real Madrid

$28 million

AIG

Manchester United

$26 million

Samsung

Chelsea

$20 million

Herbalife

L.A. Galaxy

$4 million-$5 million

XanGo

Real Salt Lake

$1 million

Source: SportsBusiness Journal/SportsBusiness Daily archives

While he expects those
types of impressions to be immeasurable, Herbalife CEO Michael Johnson said
Beckham was only part of the attraction. The company began negotiating with AEG
in December, nearly six months after MLS decided teams could sell jersey
sponsorships and a month before Beckham signed with the team.

Following the Beckham
announcement, five other interested parties approached AEG, Hunter said, but in
the end, the company felt Herbalife was the best partner.

As part of the agreement,
Herbalife will extend its sponsorship of AEG’s Amgen Tour of California, the
JPMorgan Chase Open tennis tournament, the Los Angeles Riptide of Major League
Lacrosse and the Home Depot Center.

Herbalife will be fully
integrated into AEG’s stadium, media and grassroots programs. It also has been
introduced to Creative Artists Agency, which represents Beckham, and is discussing
the possibility of having him endorse a children’s line of products due out
later this year.

Herbalife, which has 42
stores in China, also was attracted by AEG’s plan for an international tour
next fall in Asia, where Beckham is very popular.

“We looked at this as a
global opportunity,” Johnson said. “Soccer’s big in the U.S., but it’s enormous
outside the U.S., and that’s where we do most of our business.”

The Galaxy is in the
process of redesigning their jersey. A new jersey featuring the Herbalife logo
and different colors is due to appear in mid-July.